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Friday, July 17, 2015

As
Greece keeps falling to new levels of despair, more similarities with
the Argentine economic collapse and its aftermath keep showing up. In
spite of the differences between a Latin American country and a member
of the EU, there are striking similarities between the two, especially
regarding how the crisis affected people and how they cope with it.
The most obvious difference is that Greece is part of the EU, meaning it
has means of getting even more money in spite of the massive debt that
caused the problem in the first place. We can debate how much of a
solution it is to go further into debt but this simply wasn’t an option
for Argentina. Argentina wasn’t part of a main global power. Then again,
Argentina is almost 20 times the size of Greece. All European Union
countries put together ad up to 4,324,782 km2 . Argentina extends over
2,780,400 km2. Argentina has significant natural resources and is a
strong primary producer while Greece depends mostly on the export of
refined oil (which it first needs to import) cotton and tourism.
Argentina has its own currency which it was able to devaluate, which
works as pressure release valve, including the ability to print its own
money. Greece has to stick with the Euro which it does not control. On
the other hand, after its default Argentina became a no-go zone for
investors, while Greece still has the Euro and is backed by its EU
member status. The Greek crisis had three possible outcomes. First,
the one the media loved talking about the most given the tragic
implications, catchy name tag included: Grexit. Greece would leave the
EU, or get kicked out of it. They would drop the Euro and start printing
its own currency. Alexis Tsipras anti-austerity stance was what got him
elected in the first place. The Syriza party was supposedly ready to do
just that if left with no other choice by the Troika (European
Commission, the European Central Bank and the International Monetary
Fund). This would have been the path most similar to the one Argentina
took. In the case of Argentina, this wasn’t a particularly bad economic
decision. At least in the case of Argentina, having an already rich
country, getting rid of crippling austerity demands and running your own
economy would have been a way of getting back on its feet in a couple
years and even having a vibrant economy within a decade. The problem
with Argentina was its poor execution of such a plan due to corruption
and political problems. The more Argentina recovered, fueled mostly
thanks to rising soy prices, the more the ruling party took to buy
political support and increase its own power. Argentina most certainly
didn’t recover a year after the default. It managed to get a couple
mouthfuls of air by 2003 but for all practical purses 99% of Argentines
saw a non-stop decline in their quality of life and standards of living
since then. The second option would have been the most favorable one
for the people of both Greece and Europe: Reach a reasonable
compromise. Find a middle point between the demands of the Greek people,
an honest assessment of what they truly can and cannot do, and the
demands of their creditors. In a true capitalist system there are
penalties and rewards and if you poorly invest money you risk losing a
percentage of that money (sometimes 100% of it!). It’s safe to say that
investing in Greece’s economy was a poor investment, so losing some
money is understandable. What does this mean? Creditors lose some money,
they accept a haircut, just like Greeks accept some unpopular measures
so as to get the help they needed from the institutions within EU
intended for such purposes. No one is 100% happy but everyone has
something to look forward to and recovery is possible. Turns out the
worst possible outcome is the one that played out. Greece got sold,
like Argentina did during the 90’s with Carlos Menem. Everything that
led to the crisis, more debt, more unemployment, more austerity has been
accepted in exchange of a short term lifeline. The real winners here
are the corporations that will cash in on the crisis. Greeks are now
running the gauntlet Argentina went through 15 years ago and is still
struggling with. The worse is yet to come for Greece. Greece’s economic
circumstances may be even worse than Argentina’ in the long run, but
this may be offset to a greater or lesser degree if they manage to avoid
the kind of corruption and political collapse Argentina suffered.
As for the day to day life on the streets of Greece and what the people
have to deal with it’s basically a carbon copy of Argentina after the
default:1)Cash-hungry As banks close their
doors and limit people to just 60 Euros per day in cash, the society
desperately turns to cash. These days in the streets of Greece, just
like it was in Argentina back in the day and still is over a decade
later, cash is indeed king. If you have it, you have much greater
leverage for negotiation than the guy with money stuck in the bank.2)Hunting for ATMs and waiting in Line

It becomes a daily task to find an ATM with cash, find one in a safe
location, and hopefully one that isn’t packed full of people.
Unfortunately there’s no way around it and for many having to wait
several minutes or even hours at an ATM or bank line becomes a reality.
The solution? Patience. Patience or the stress will eventually kill you.
Meditate, do yoga, watch a romcoms, spend time with friends or just do
anything you enjoy doing. During an economic collapse you cannot let
stress and depression get to you. This is the silent killer that
destroys most lives during such events.3)Budgeting
With a 60 Euro daily limit you have no choice but to make the most of
it. People that thought they knew how to keep an eye on their expenses
have a newfound meaning for the word “budget”. Money can’t be wasted and
must be spend on the basics in the most efficient manner possible.
Instead of going to the movies you go for walk. Out to a restaurant? No,
lets do a picnic with a couple sandwiches. Spending 10 bucks on beer in
a pub? Not anymore, those were the good old days. Even when it comes to
food your approach is different. Instead of buying ready made quick
microwave meals its about buying rice, pasta and getting the most
calories per buck spent.4)Barter

With high unemployment, banks closed and little money on the streets
it’s natural that people turn to barter just like they did in Argentina.
Having actual cash is of course better and how well barter work is the
topic of another article, but when you don’t have anything else you try
to make the most of it. It sure isn’t the utopic fantasy many preppers
believe it to be.5)Crime for Cash With more
cash on the street and kept at home, criminals know there’s more loot to
be found in most homes. The Greek government saw the risk of robbery in
ATM lines as well and increased the police presence. Poverty and social
instability combined with corruption always leads to more and more
violent crime. This is something Greeks should be preparing for. As bad
as you may think it already is, it will get a lot worse.https://www.phantis.com/blogs/ioannis-michaletos/rising-trends-greek-organized-crime6)Suicide
The first two years after the Greek austerity programs suicide rates
went up 35%. This same thing happened in Argentina after the economic
collapse. Spain also saw a sharp increase in suicide rates after the
crisis. In my case, when I think of suicide rates I remember the trains.
Whenever there were problems with trains, you knew it was because
someone killed himself. For years this would happen pretty much every
week in one railway or another. Greek Crisis Has Seen a Rise in Suicides and Depressionhttp://www.newsweek.com/greek-crisis-has-seen-rise-suicides-and-depression-3530567)Riots and Civil Unrest
Molotov bombs, tear gas, rubber bullets. It all becomes part of
everyday life. Eventually demonstrations become protests which the
government doesn’t bother addressing anyway. These become roadblocks and
a pain for commuters. When protesting isn’t enough, when people are too
poor, maybe even hungry and simply mad, looting starts happening more
often. You just learn not to get involved and just walk past stores
being looted and sporadic riot. You try not to think about it too much
just avoid the area.8)Political fallout In the
case of Argentina the signs said “Que se vayan todos”, which means get
rid of them all, in reference to politicians. Argentines just stopped
believing in politicians all together. All they do is talk and once they
are elected all they do is steal. Syriza came to power thanks to its
anti-austerity banner, only to then rotate 180º and accept even worse
bailout conditions. I doubt Greeks in general have much trust in
politicians by now.9)Austerity and Mass emigration
With half the people in Greece under 25 unemployed, it is
understandable that many chose to leave. 200.000 Greeks have left Greece
since the crisis started. The same number of Argentines escaped to
Europe alone after the economic collapse. More austerity will mean
even less jobs, but most of all far worse living conditions for everyone
no matter what age. Argentina, Greece and anywhere else in the world,
when SHTF for real those that can will escape looking for a better
future.http://www.youthemploymentdecade.org/en/repor/emigration-the-only-solution-for-young-greeks/10)The elder are among the most vulnerable
Being retired and living off a pension is not much better than being
young and unemployed when an economy collapses. At a certain age, you
don’t have tools left to work with and whatever pension you have will
have to do. Inflation eats up the purchasing power of such a fixed
income and it hardly ever keeps up with it. As banks close and
capital controls are enforced, the less tech savvy ones such as older
people are particularly sensitive. Many older folks out there don’t even
use ATM cards and will always go to the bank so as to speak with an
actual person to get their money. These people are particularly
vulnerable. In the case of Greece, even with closed banks they had to
open for some time just to help such people. The exact same thing
happened in Argentina and the images were just as sad.11)Corruption
Corruption exists everywhere and it is true that in some places it is
worse than others. Maybe there’s more corruption, maybe it’s the type
that allows for worse things to happen. Sometimes there’s a lot of it
but a façade is kept so as to keeping up appearances. What you can be
sure of is that as poverty gets worse and people get more desperate it
becomes the law of the jungle out there. Its every man for himself and
whatever can be done to survive goes. Corruption also becomes a part of
life and eventually it becomes the reason why getting out of the mess is
so hard. The worst part is when corruption becomes socially accepted
and for an entire generation that’s all they ever knew. For them, it
becomes a goal to get politically involved in certain parties with the
specific purpose of gaining financial leverage if not downright stealing
from public funds.12)Poverty and ending up Homeless
That’s what it comes down to, doesn’t it? When its all said and done,
when the numbers and stats have been published and discussed ad nausem
its about being poor or even worse ending up homeless and eating out of
the trash to survive. This was the reality for tens of thousands in
Argentina after the economic collapse. Every night the streets would get
flooded with “cartoneros”, trash scavengers. Officially they are
looking for recycling material. There’s a much grimmer reality though.
I’ve lost count of how many times I’ve seen people grab a quick bite out
of something they found while going through trash on the sidewalk.
Watching children as young as five eat out of a garbage bag is not
something you want to see. Another particularly tragic moment I’ll never
forget happened while running errands in the Capital of Buenos Aires
one day. I came across this very old lady, about eighty years old. She
was well dressed had nice makeup. There was a dignity about her that
reminded me of my grandmother. She was holding on to the burglar bars of
a window (all windows in Buenos Aires have those) for support and she
was crying. She had a small suitcase with her. I couldn’t help stopping
and asking what was wrong. I thought she had been mugged, that happens a
lot or maybe she got lost. But no. She said she had lost her home and
now had no one and nowhere to go. You could tell just by the way she was
dressed but most of all by how she stood in spite of barely being able
to stand on her feet, this was a woman that had worked hard her entire
life and didn’t deserve this. I don’t even remember what I said to
her. I do know I didn’t do anything to help her because there was
nothing I could do. Like millions of others, I could barely take care of
myself and my family let alone help anyone else. When all is said
and done, when the numbers have been crunched, the billions made by the
hedge funds and politicians, its millions of lives that have been ruined
so that a handful can reap their evil harvest.Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.

5 comments:

Don Williams
said...

1) One of the things you notice about the lying news media and the lying politicians is that they never discuss wherethemoney went. Who got richer and who got poorer. Anyone wantto guess which EU banks have accounts to hold the money stolen from Greece by past tax evasion, etc? Or how much Greece's creditors did to aid past Greek corruption? I wonder when the lowly Mafiz loan sharks finally catch on and start lending to politicians?

it is a fraud, as simple as that. They want to steal the national wealth of Greek people,land, public water system, electricity system, ports, airports, railways, mineral resources, private property etc we are talking about Real wealth not printed papers...of course other nations are to follow.

How can you avoid voting corruption in -- when the politicans make you promises before the elections and then stab you in the back afterwards?

And it is not just Greece and Argentina. The US Democratic Party is a massive con game. I worked for the Obama campaign in 2008 -- both primary and general. Admittedly, I did it because I despised Hillary and John McCain. But I and many other Obama supporters have been aghast at how he shoveled money out to the Rich while dumping massive misery and unemployment onto the average citizens. See http://www.washingtonpost.com/politics/liberal-activists-see-bernie-sanders-as-champion-for-causes-failed-by-obama/2015/07/19/8b5fc752-2e09-11e5-8353-1215475949f4_story.html

The two outsiders getting support in the USA are Bernie Sanders and Donald Trump. Trump is a billionaire whereas Bernie Sanders is one of the few Senators who is close to being poor. But who is more likely to sell us out as President? Does anyone think Bill Clinton got that $200 million in wealth giving $700,000 speeches to the Little People after leaving the White House? Does anyone think Michele Obama hasn't noticed the value of Rich friends? I don't know -- maybe Trump is rich enough that he doesn't have to sell the lives of another 13,000 Americans to the Israel Lobby and Big Oil.

Meanwhile, who is going to pay off that $18 Trillion in US federal debt? And make good on the $40 Trillion shortfall in assets needed to make good on promises to baby boomers who have been paying into Social Security and Medicare "accounts" for 45 years. Accounts which are empty.

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